The Credit Card Accountability Responsibility and Disclosure Act of 2009 will take effect Feb. 22, instituting a series of regulations to protect consumers younger than 21 years of age from excessive debt.
According to a 2009 study conducted by Sallie Mae, 84 percent of college students have at least one credit card; the average student has 4.6 cards. Students with at least one card carry an average of $3,173 in debt.
But the CARD Act limits both credit card companies and the young consumers they target. Credit issuers will no longer be permitted to use free merchandise to market their cards at college-sponsored events or within 1,000 feet of college campuses.
Moreover, certain provisions of the act prevent students from obtaining cards unless they co-sign with an adult or prove they have adequate income to pay off monthly balances. A maximum credit line of $500 or 20 percent of the annual income will be offered to adults younger than 21 years of age who do not meet these requirements.
Yvonne Hubbard, the University's director of Student Financial Services, expressed support for the CARD Act.
"The act considers the poor practices that credit card companies use to entice students without allowing the students to realize the full consequences of having a card," she said.\nHubbard added that AccessUVa, the University's financial aid program, helps students to manage credit.
"AccessUVa's focus has been to teach students to be in control of [their credit rating] because it is going to affect the rest of their lives
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